How to solve Canada’s housing market, Ending the Government’s Involvement in Mortgage Insurance! – May 5, 2019,
As most people know the Huffington Post in most instances, reminds you of the NDP (New Democratic Party), even if it isn’t the intention of their writers to appear to be writing for the benefit of the NDP Party, their solutions to easy to fix problems, always remind me of the New Democratic Party. A different government solution would fix this problem is how the New Democratic Party approach problems that often get fixed on their own. In the following article titled 6 Things Canada Could (But Won’t) Do To Solve The Housing Crisis – Huffington Post. The author makes 6 things “Canada” can do to solve the housing crisis all six involve more Government intervention.
- Reduce immigration levels
- Build large-scale community housing
- Bring back incentives to build rental housing
- Actually limit the amount of money being lent to buyers
- Allow more suburban sprawl
- ‘De-zone’ the suburbs
Now, I’ve often argued that the NDP is probably the most racist political party in Canada, as an example I’ve met a lot of South Asians who are voting for Jagmeet Singh simply because he looks like them. The New Democratic Party obviously deals with Democracy which tends to favor the majority dictating to the minority dictating what they think is best for every, so reducing immigration levels comes as no surprise in the article as something the GOVERNMENT can do to solve the housing crisis.
Regarding Building large-scale community housing, another thing Daniel Tencer wants the GOVERNMENT to be responsible for he doesn’t include the costs associated with building government housing. A lot of the people who are part of Left Wing Political parties, don’t actually live in the government housing developments. Humans are complicated, especially humans who identify as poor, a lot of Canada’s so-called poor often feel entitled to the labor of others, furthermore government workers often unions and nothing makes private entities happier than an inflated contract with Government. Now, the private sector is more than willing to build rental housing, but now we start to get the talking about CMHC insuring mortgages and the behaviors of so-called poverty stricken Canadians.
If you go to most Government “Projects” as their often called, the people there behave like normal people who rent behave, with a lack of respect for their rental housing. People will destroy the property, they won’t report need repairs, they’ll defecate on the property, won’t take any responsibility for the behaviors of their children and then call on the government to rectify the situation if rental prices go up, or if their welfare check goes down. This is only the tenant side, now on the maintenance side, once a government housing project goes up, why shouldn’t the government workers hire to maintain the place not unionize? Why shouldn’t a private contractor demand more money to fix a problem? why shouldn’t the tenants continuously destroy the property? This is the reality, this is why the government should stay out of the housing market.
The truth is the private sector and charities solved these housing problems a long time ago, but you see humans won’t change if they don’t have too. By the government building government housing unnecessarily, the end result is people’s attitudes haven’t changed, look at Canada’s standard of living for our poor compared to Russia’s? I personally think our poor live better than some middle-class people in Russia, why because the private sector has more flexibility to solve problems in Canada than it does in Russia.
Bringing back incentives to build rental housing can’t happen, and this is where you can clearly see that Daniel Tencer has little knowledge about business. Business people pay close attention to costs. Rent control is price control, if you don’t understand the business side to rent controls, please pay attention, rental controls mean that if there’s structural damage to a rental property, the property owners can’t go to the tenants to fix the problem.
This is basically the reason why buildings, large in rising buildings became a solution to homelessness because the larger the building the easier it is to spread out the costs, the moment a government steps in sets a cap, it changes everything. At this point, rental housing developers have to completely change their model, which in many instances involve them having to borrow capital from other sources. Most rental companies are not only indebted but are reliant on debt to keep themselves afloat. Sure VALUATIONS are high and perceptions of their wealth are inflated but for many of them, they’re a bad market quarter away from bankruptcy and remember that most Pensions are tied to real estate. All of these silly schemes revolve around government poking its nose into real estate, prior to rental controls, apartment buildings went belly up all the time, which is great, because tenants would often get great deals, now that the government is rewarding mortgage purchases, building rental housing is now secondary in Canada to Condo development, so again I’ illustrating the GOVERNMENTS involvement in real estate as the culprit for our housing crisis.
Actually, limit the amount of money being lent to buyers this is the dumbest part of his argument, because instead of pointing out the culprit which is CMHC, Daniel Tencer blames the banks, the entire housing market scheme in Canada revolves around insurance for mortgages and low money down payment purchases facilitated by the Canadian Government! Banks would rather borrowers put more of their own money down, they go along with this nonsense because the Government mandated it and the banks/financial institutions to want Discrimination lawsuits levied against them. So, even debating this topic is ridiculous.
Allow more suburban sprawl, hey, why not, but then you’d have to get rid of city planners and allow the market to decide where a sprawling city should form. Historically cities were formed based on where all the energy was. In Califonia, the Gold Rush brought people there, all the jobs created by the Califonia Gold rush made it America’s most populous State, prior to the Gold Rush nobody had any interest in the place. The market typically decides how what city grows and what city doesn’t central planners, are often puzzled why people gravitate to Toronto? People come to Toronto for their own reasons, but the problem is many of the people who come to Toronto wouldn’t stay here if the government wasn’t providing them welfare.
If someone is homeless in Toronto it’s usually a sign that somewhere along the way, the cost of living got to high for them, but it never occurred to them that it might be in their best interests to move to a more affordable location, why? Who knows, but it would be nice if instead of the Government providing welfare for people the government would instead advise them of other developing cities that they could take advantage of pioneering. There’s actual substance in that portion of Daniel Tencer’s Huffington Post article, but unfortunately, his basis is still rooted in more Government intervention.
‘De-zone’ the suburbs hey, great idea, Canada’s developers have wanted this forever and being that CMHC and other government incentives exist, why not push for it now, my market-based thinking is closely aligned with this, however, this is the one area that I genuinely believe should be debated. Why because Ghost cities exist, ghost cities can exist no matter what type of system you have. Example if Coal is banned by the government an entire town based on coal can become a ghost town in a couple of years. Property get’s its value based on the activities or the wealth being generated there, the moment the jobs disappear, the town, city, province country disappear with it.
Again this is how the Government can destroy an entire nation. The moment something is banned an entire wealth creating industry can be destroyed, thereby forcing the people of those towns, cities, provinces, States, and countries to emigrate to a place or places overflowing with wealth and limited Government involvement. I’ve always said at least the Liberals understand that once they stick their noses into the Market, they have to provide a reward for the Private Sector, the NDP, on the other hand, can’t seem to comprehend that socialism and democracy don’t work unless the Free market is allowed to create wealth, opportunity and prosperity where there was none prior.
Interesting times ahead.
